Sustainable Growth Advisers (SGA), an investment management company, released its third-quarter investor letter for its “U.S. Large Cap Growth Strategy.” A copy of the letter can be downloaded here. The portfolio returned -1.3% (Gross) and -1.4% (Net) in the third quarter, compared to a 10.5% return for the Russell 1000 Growth Index and an 8.1% return for the S&P 500 Index. SGA’s investment objective is to invest in high-quality growth businesses expected to achieve consistent mid-teens earnings growth, accompanied by stable revenue and cash flow. However, in Q3, the market leadership was adverse for SGA’s investment style as lower-quality stocks and cyclical industries outperformed. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, the SGA U.S. Large Cap Growth Strategy highlighted stocks such as Apple Inc. (NASDAQ:AAPL). Apple Inc. (NASDAQ:AAPL) is an American multinational company that designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. The one-month return of Apple Inc. (NASDAQ:AAPL) was -3.15%, and its shares gained 11.49% of their value over the last 52 weeks. On December 31, 2025, Apple Inc. (NASDAQ:AAPL) stock closed at $271.86 per share, with a market capitalization of $4.035 trillion.
SGA U.S. Large Cap Growth Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its third quarter 2025 investor letter:
“Apple Inc. (NASDAQ:AAPL) was a contributor to portfolio returns for the quarter, supported by strong performance across all geographies, including a rebound in China. The company managed to navigate tariff impacts, while in China the success of subsidies demonstrated continued demand for quality at the right price. Despite continued challenges in talent acquisition and AI development, Apple’s results were robust, and demand for its high-quality products remained resilient. Management guided for mid to high single-digit top-line growth in the upcoming quarter. Strong buyback activity and stable valuation further supported the stock, even as excitement around AI shifted investor attention elsewhere.
Looking ahead, Apple remains a compelling long-term investment due to its premium brand positioning, pricing power, and massive scale. The company’s transition toward higher-margin services with recurring revenues, combined with a loyal customer base locked into its ecosystem, provides stability and predictability. Continued expansion in emerging markets, ongoing innovation in hardware and services, and the network effect of its platforms all contribute to a long runway supporting high single-digit earnings growth. During the quarter, we raised the position target to an average weight.”
Apple Inc. (NASDAQ:AAPL) is in 8th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 166 hedge fund portfolios held Apple Inc. (NASDAQ:AAPL) at the end of the third quarter, which was 156 in the previous quarter. Apple Inc. (NASDAQ:AAPL) reported revenue of $102.5 billion in the September quarter, reflecting an 8% year-over-year increase. While we acknowledge the risk and potential of Apple Inc. (NASDAQ:AAPL) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Apple Inc. (NASDAQ:AAPL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Apple Inc. (NASDAQ:AAPL) and shared Harbor Capital Appreciation Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
